San Mateo County housing market sees boost

Rachel Ni, Coldwell Banker real estate agent, said it reminds her of the peak of the market from last year, but believes it has yet to reach that mark.

In April 2022, interest rates floated between 4.75 to 5% for a 30-year fixed-rate mortgage, according to Freddie Mac. By November, that number shot up to 7%, shocking the market and leaving many prospective sellers and buyers on the sidelines.

As of July 13, interest rates were 6.96% for a 30-year fixed-rate mortgage, according to Freddie Mac.

So what changed? Ni says buyer expectations.

“Everybody is talking about a new norm, a lot of people last year were sitting on the sidelines,” Ni said. 

One sign the market is trending up, she said, is she is receiving multiple offers for her listings and above the asking price. However, she said the competition might be fueled by low inventory, which in the second quarter was 430, compared to the second quarter last year, which was 621, according to SAMCAR.

“Inventory is low, families are trying to get into the good school districts, or young couples ready to start their new life, and they seem to have accepted that interest rates might not be falling any time soon.”

In the second quarter, the average median sale price was $1.9 million for a single-family home, up 8.57% from last quarter. However, in the second quarter of last year, the average median sale price was $2.65 million, a nearly 40% increase. Ni attributes it to the change in interest rates.

“The average mortgage price is more than double from last year, and people’s capacity to get a loan is dropping drastically because of the interest rates,” Ni said.

Ni indicated the market is favoring sellers primarily due to the low inventory which has stimulated multiple offers. However, she added homes need to be priced correctly to create a buzz and get multiple offers.

Another factor is there are fewer buyers in the market due to the high interest rates, Ni said.

“The interest rate is so high, affordability for the buyers dropped,” Ni said.

Mita Kapadia, RE/MAX Realtor and broker, said prospective buyers seem to be looking for turnkey properties.

“People who are thinking about selling, you should fix up the property as much as possible to attract buyers and pricing it correctly,” Kapadia said.

But she echoed Ni’s thoughts, saying buyers have lowered their expectations toward interest rates.

“They are realizing this is going to stay, it might go up and people are taking action,” Kapadia said.

She said the low inventory issue may also be fueled by many homeowners stuck in a low rate, and moving would mean they lose that rate. It freezes anybody trying to move up and downsizing would also become unreasonable, she said.

nick@smdailyjournal.com

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